Reaching the Rural PoorReaching the Rural Poor

A World Bank Strategy for Rural Development

A World Bank Strategy for Rural Development

Some Global Success in Food ProductionSome Global Success in Food Production

Broader Success with Agriculture Broader Success with Agriculture

International price of food decreasing Caloric intake risingPercent of undernourished fallen Success rate of World Bank agricultural projects about 70% (OED)Successful rural development in China, Thailand, Central Europe, parts of Latin America was initial stimulus to their rapid economic growth

Agriculture Must Grow Faster in Most Low Income Countries to Achieve Millennium Development Goals

Agriculture Must Grow Faster in Most Low Income Countries to Achieve Millennium Development Goals

Rural poverty and low agricultural growth persists in most low income countries3.6 % p.a per capita GDP growth is needed in low income countries to cut poverty in half by 2015Since 24% of low income country GDP is agricultural; agriculture must grow at about 3.5% p.a to achieve the overall growth and poverty reduction objective

POVERTY REDUCTION IS THE SOLUTION TO HUNGER

The hungry are the poor; they do not earn enough to buy food, or if farmers they do not produce enoughIn some countries, they may also be people with poor access to food or who have nutritional deficiencies due to disease, waterPoverty reduction plus improved infrastructure (including for food distribution) and social services is the solution

AGRICULTURAL DEVELOPMENT IS AT THE CONFLUENCE OF THE MDGs, HUNGER, AND SOCIAL PROTECTION

Agriculture is key to:– Growth in most low income countries– Household poverty reduction of the rural poor– Food security through farm income growth and in

some cases food availability– Safety net for the rural poor (who are often

subsistence farmers)

Can Agriculture Grow Faster in Low Income Countries?

A Major Problem: declining Interest by the Bank and by Other DonorsA Major Problem: declining Interest by the Bank and by Other Donors

Champions of rural development are weakOther priorities have been added by governments and donors; developing countries allocate half the public budget to rural areas as they do to urban Rural development projects often performed poorly in the pastIrrigation, water, forest, fisheries projects are often controversialPrivate returns to investment in agriculture in low income countries are often very low

The New World Bank Rural Development Strategy

The New World Bank Rural Development Strategy

Preparation ProcessPreparation Process

Regional rural development strategies

Review of project experience and analysis

Consultations in client countries, in the Bank, with donors and NGOs

Analysis published in technical documents

Corporate strategy developed through ‘bottom-up’ approach

Detailed implementation plan

New Strategic PrioritiesNew Strategic Priorities

Fostering broad-based rural growth, based on: agriculture as the primary source of growth, food, and safety net; combined with non-farm and private sector activity in rural areasImproving social well-being, gender equity, managing risk, and reducing vulnerability in rural areasEnhancing sustainable management of natural resourcesMore participation by rural populations in program managementDonor alliance and partnership

Responsibilities of Developing CountriesResponsibilities of Developing Countries

Avoid excessive taxation of farmers and agro-industry which arises from administrative pricing of outputs, overvalued exchange rates, and excessive industrial protection.

Policies and investments needed to create open markets for agricultural products, inputs, and labor, including policies which create a positive climate for private investment in farming and agro-industry.

Policies and investments in agricultural research, extension andeducation, in collaboration with the private sector and with foreign institutions, to allow greater participation in the global agricultural knowledge and scientific revolution.

Responsibilities of Developing Countries (continued)

Expanded investment in rural infrastructure, rural health, education, energy, telecommunications, finance, in conjunction with local communities and the private sector.

Promotion of producer organizations and trade associations, so that rural people have more responsibility and more say in ruralbased activities.

Decentralization of some government functions to local government authorities.

Where necessary, improved land administration and land reform.

Responsibilities of Developed Countries

Agricultural trade liberalization, for example, to the levels of tariffs and non-tariff barriers which are established for non-agricultural products.

Reduction of agricultural subsidies, which currently depress world prices and expand world agricultural market share held by developed countries.

Expansion of agricultural and rural development assistance to developing countries to the levels characteristic of the early 1990s.

Responsibilities of Developed Countries (continued)

A focus on Sub-Saharan Africa is required in international assistance for rural development given the particularly difficult food and agricultural situation which exists there.

Better coordinate aid flows to developing countries.

Support to the transfer of scientific findings of relevance to developing country agriculture.

Overall Implementation ThrustsOverall Implementation Thrusts

Raise the profile of rural development in national policyScale up innovative and successful investments, while exploring new approaches and innovationImprove the quality and impact of donor operationsImplement global priorities (e.g. reduce deforestation, water pollution, over-fishing, loss of bio-diversity, adapt to climate change, share the fruits of agricultural science with poor countries)Enhance partnerships between governments, civil society, NGOs, and donor organizations for rural development, including a global forum for rural development

Provisional Work Program to Support Locally Driven Rural Strategy Formulation for FY03-04

Africa East Asia Pacific

Europe and Central Asia

Middle East North Africa

Latin America Caribbean South Asia

FY03MadagascarNigeriaCameroonEthiopiaAngolaDem. Rep. of CongoLesotho

FY04TogoBurkina Faso Congo,Dem.Rep.

FY03VietnamPhilippines Papua New Guinea

FY04Indonesia

FY03RussiaTurkeyUzbekistanGeorgia

FY03DjiboutiYemen

FY04Egypt

FY03NicaraguaBrazilColombia Mexico

FY04HondurasPeruPanama

FY03-04Afghanistan

India:UttarPradeshMaharashtraAndhraPradeshKarnataka

Pakistan:Sindh

Sri Lanka

Bangladesh

Regional Priorities for Early Action in Scaling-upGood Practices and Innovative Approaches (1)

RisksRisks

Unable to give proper voice to the rural poor at national levelDesired multi-sectoral collaboration does not materialize within donor agencies and governmentsInstruments available to donors not conducive to rural focus, learning, and innovationIndustrial country tariffs and subsidies continue to hinder developing country access to markets

Figure 1. US Farm Household Income by Source and Sales Class, 1998

-$50,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Cotton/RiceOther Cash GrainsCornWheatCotton/RiceOther Cash GrainsCornWheatCotton/RiceOther Cash GrainsCornWheatCotton/RiceOther Cash GrainsCornWheatCotton/RiceOther Cash GrainsCornWheat

Government Payments Farm Income Net of Government Payments Off-farm

$500,000 +(5.1 % of farms)

$250,000to

$499,999(12.4% of farms)

$100,000to

$249,999(25.5% of farms)

$50,000 to

$99,999(18.1% of farms)

less than $50,000(39.0% of farms)

Revised Approach to Agriculture in Developing Countries by Governments and Donors

Revised Approach to Agriculture in Developing Countries by Governments and Donors

Improve productivity and quality of the entire food chain from input supply, to farm, to processor to marketAt the farm level, diversify agriculture and boost high-value products, and tailor assistance to each major farm typeRenew commitments to science and technologyPromote food safety

Recognition of the Importance of Rural Non-Farm Economy and the Private SectorRecognition of the Importance of Rural Non-Farm Economy and the Private Sector

Improve investment climate for private investment in rural areas, promote labor mobility

Provide agricultural, financial, infrastructural, market and social services in part through the private sector, using market solutions

Promote producer organizations, trade associations, business chambers, and public-private cooperation

Developing Rural Infrastructure and Social Assets, and Managing Risks are Essential

Improve access to infrastructure and social servicesImprove access to nutrition and health Increase access to and improving the quality of rural educationProvide assistance in managing household food securityProvide new risk management instrumentsBuild the capacity of the public and private sectors and civil society to manage their own services

A Continued Commitment to Enhancing Sustainable Management of Natural Resources

Environment, forestry and water strategies in the Bank give overall guidelines in approaching rural natural resource management Elements will include– Reducing land degradation– Improving water management– Sustainable production of forest products while

protecting the environment and preserving critical natural habitats

Global Forum for Rural DevelopmentGlobal Forum for Rural Development

A Global Forum for Rural Development

Mission: To contribute to the elimination of rural poverty and the enhanced economic development of rural areas through deepened global, regional and national cooperation and collaboration

Principles:Direct participants – development agencies, donors and IFIsFoster interlinked formal and informal alliances and activities with stakeholder representativesPlaces emphasis on action, flexibility and responsivenessLight on overheads and bureaucracy

A Global Forum for Rural Development

Outputs may include:Raised awareness and advocacySponsored policy and public debateIncreased levels of investment and development funding includingincreased co-financingJoint analytical and policy work on challenging issuesShared lesson learning in good practice and innovationAuthorizing and enabling environment for related alliancesJoint monitoring and evaluation

DONOR RESPONSE TO PROPOSAL

Keep the group informal and non-bureaucratic;Focus on information sharing, advocacy for rural development, sharing best practice, peer review, and only in the longer run to try to have an operational impact;We will need to show value added of such a group; otherwise interest will fall off;Meetings should be scheduled using the opportunities of other fora (which the World Food Summit provided a good example of);There should be rotating leadership among the donors. The Bank will act as focal point until agreement is reached on a chair;The next meeting is likely to be at Jo' burg, although some will get together in Montpelier for the European rural meetings;The Bank's draft TOR for the forum were circulated. Response was broadly favorable, but added comments will be sent to us in writing;

There is an issue of where the secretariat should be based. The FAO would like to do this and I support this view. However, there were some questions asked about how this would work. Each donor is to name a person who is the focal point;Each meeting would have at least one substantive subject for discussion. I suggested that we should discuss the differences between our respective rural and agricultural strategies. There was strong support for the idea of having a substantive topic to discuss at each meeting, but mixed support on the subject that I suggested (the German response below is not favorable to the topic). Any other topics suggested?Avoid giving impression of donor ganging up on developing countries. But there was a view that developing countries should not at this point be invited to join, before we have established exactly what we can achieve with this forum. We can change this in the future

For Further Information and Commentwww.worldbank.org/ruralstrategy